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U.S. Policy on Financial Aid to Nasser Outlined by State Department

American assistance to the United Arab Republic would not increase Nasser’s capability to import arms from the Soviet bloc, nor would withholding assistance decrease that capability, Assistant Secretary of State Frederick G. Dutton declared today.

In a letter addressed to Representative Leonard Farbstein, New York Democrat, the Assistant Secretary asserted that charges that Egypt would have to divert money from domestic needs to pay for Russian arms were “not valid.” He said Egypt had “an excess of unused Soviet credits upon which to draw.”

The State Department, said Mr. Dutton, recognizes “Israel’s deep concern with the issues arising from the Arab-Israel problem, ” However, he added that “prospects for its settlement and for stability in the region as a whole are improved, if the countries involved are assisted to pursue their legitimate goals for economic development.”

Mr. Dutton said that “by demonstrating American interest and support for the U. A. R. ‘s efforts for economic development, there will be a stronger foundation on which mutual problems can be worked out.” He stressed that the State Department was “convinced” of the determination of the Egyptians “to search for progress and to maintain their independence. They urgently require foreign aid in pursuit of these goals,” he said.

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